He Yi: The era of fur removal may be coming to an end

Author: He Yi

Some summaries, not investment advice.

2017 was the era of ICOs, public fundraising directly replaced VC and PE, so the bull market of 17-18 belonged to the OG platform, belonged to delegated investment. As long as you grab a share, you can make money.

In 2021, the rise of DeFi has led to a diversified market, and as long as the money is fast, the rush to the dog can make money.

At that time, IEO could still negotiate with the project party to release a portion of the shares to users, so the listing price was generally low, and the typical feature of this period was to buy new, not old.

But now IEO is generally considered to have legal risks in most compliant countries, so it can only be airdropped and priced by the market. This means that if the circulating supply is large and the opening price is low, the project will perform relatively steadily, such as BB and Lista. However, compared to 2021, the rise is still too fast and there is a lack of sufficient whipsaw process.

This wave of pump in 2024 is initiated by BTC ETF. The smart money belongs to top-tier projects and studios. They work together to create beautiful data. On one hand, the project team can raise more money from VCs (if you observe the top VCs in the market, they have a scale of over one billion US dollars, which indeed pushes up the valuation of good projects). On the other hand, the project team, with both money and users, has great confidence. There are millions of users on-chain. It doesn’t matter whether the project is listed on a certain platform or not. There are plenty of CEXs to choose from, and even if there is no CEX, there are DEXs. If all else fails, there is always a DEX on their own chain.

The trading platform does not have the pricing power, so for projects with high valuations, everyone should look at the fundamentals instead of just the market cap, and it is better to also consider the circulating supply.

Today, indeed the market has changed again. The infighting between the Studio and L2 projects has turned into a farce, and the era of Studio may be coming to an end. Currently, there are more professional players in both the primary and secondary markets, they have various tools to hedge risks, but this has also expanded the market size. As an ordinary investor, using the ICO of 2017, the IEO and arbitrage of 2021, and even the Studio strategy of 2023 may not be suitable for today’s market.

Is it true that the lack of VC investment and fewer project parties will create a healthier market? In every cycle, there are projects that survive the ups and downs, but also countless top-notch projects that fail along the way. Whether it’s Web2 or Web3, entrepreneurial success is rare, and projects that cross the divide and navigate through cycles are even rarer.

Investment carries risks, please be cautious when entering the market.